When others are fearful, be greedy – Warren Buffett
Entrepreneurs should always be prepared to invest in a downturn, and they should not panic when the industry makes huge turns. As we described earlier, starting companies in the so-called bad times could be the best of strategies. This stems from the belief of not being over pessimistic in bad times.
There are many opportunities available in downturns; you have to train yourself to find them and to take advantage of them. Look for gaps to fill, or a way to disrupt the current way that people are conducting business. Many new innovative ideas and startups come about during downturns. Take advantage of the situation that other people fear. In fact, there are opportunities whether in bad or good times, so just look carefully for them.
Saving Yourself from a Downturn
If you can plan to be in a survival mode in a downturn and keep your cash flow positive while also taking the opportunity of a slowdown to continue to update and upgrade your capability and technology, you may never have to worry about the huge gyrations of the ups and downs of a business cycle. What may seem as huge gyrations of the industry to others will look like the normal course of business for you if you follow this philosophy, because you will be doing something constructive in such a downturn.
Run a lean company, efficient and cost effective from the start. The more cash you have in hand (especially during a downturn) will help you survive and come out on top during any crisis. Also by running a company lean, you will have less risk that is in the market’s control. So any change in the markets will not affect you that strongly.
So when others start to worry and get conservative in a downturn, the entrepreneurs should open their eyes wide to look for the opportunities others are not seeing, and when others are enjoying an upturn, the entrepreneur should start preparing what to do for the next downturn, and how to survive it.
Another way of looking at this issue is whether the cup is half full or half empty. Most entrepreneurs see it as a half filled cup that has given them a head start, and all they have to do is to fill up the other half. They think that it could have been much worse and the cup could have been completely empty. But even if the cup is empty, the entrepreneur will perceive an opportunity to fill up the empty cup by doing things differently. And this brings us to the second belief entrepreneurs have, which is, being optimistic and believing they can change the world.